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Eugene Fama on Winning the Nobel Prize for Economics

10/14/2013 4:04PM

University of Chicago Professor Eugene Fama is widely recognized as the "father of modern finance." On Monday he was one of three Americans to win the Nobel Prize for Economics. Fama joins the News Hub.

This transcript has been automatically generated and may not be 100% accurate.

... the the ... she is to search ... not only ... did we change the views among researchers ... but also influenced ... more good practice in many ways ... three Americans take out the Nobel Prize for economics and a full one point two million dollars an excellent insight into financial markets ... welcome here Monday afternoon news have I'm Sara Murray ... he was asleep PennyMac isn't until the prize for economics the Univeristy Chicago is Eugene Fama and like Peter and then ... and Robert Shiller family health plan price for their work in asset prices and behavioral economics ... Mr. commitee comments on the effort even as the father of modern finance joins us now from Chicago ... I he told her how are you ... hungry to regulation ... aam when you ... get started so what's the first time you had when you get this call telling you that you want ... it is believed ... to ... be ... completed during Wednesday's say that ... I say thank you very much ... that the that ... of a will that do any of ... the year present basically taught us that we are fooling ourselves and we think that we can make a bunch of money by timing the stock market late ... and so are the principles that scary ... so how did you get into this kind of research in the first place is ADN that ... asset prices are actually are a rational model ... will live through a ten year break ... this goes back to the early nineteen sixties when he ... competed risky move on ... and people were interested ... in using them to analyze the bodies of data ... in stock prices were among the most easily available data so ... the economists are interested in ... buying computers to stop the lies and The Creek ... and then people started to ask well what we expected ... markets were being traveling ... musician market theory in mind that ... and then it developed into ... basically fifty years of testing ... the effects of the very end I didn't that dance and markets quickly incorporate the latest information to asset prices ... Robert Shiller of course also won a Nobel today but his return research tells us that ... the for all kinds of reasons and a lot of them are actually very rational twenty make of the fact that they awarded a prize to both India ... the ... you have to move well ... it is I think with the situation is that ... Bob and I agree on the fact that we disagree in the interpretation ... so ... he can speak what's better what does the Nikkei and that's when it comes down to ... so his interpretation has too much volatility ... in markets ... around because prices are much lower than ... paying dividends but ... left out of that is the fact that the price of hearing the rest ... of the assets of areas of stocks very soon ... in that generate additional volatility ... it's quite consistent with an efficient market so ... that there is lots of room for disagreement ... here I don't think you disagree much with the ... implication that there isn't much money to me the money it's about ... ACO not if they have a large body of work here and now you also haven't nailed down ... what's next for you areas of the senior Africa ... mean ... what's next for you where you focus on your Afro around ... while it seems this that that ... as soon as the ... comedian above goes ... place them in a way to go back to work a lot of ... which is to do more of the